Ayo report: CFO acted in the PIC’s interests

An independent inquiry into suspended Public Investment Corporation chief financial officer Matshepo More has found that she served in the interests of the fund manager when the PIC entered into a controversial deal with Ayo Technology Solutions.

It found that, although More withheld crucial information from the PIC’s portfolio management committee (PMC) regarding the fund manager’s investment in Ayo, this did not place the PIC at a disadvantage. 

As part of an internal investigation instituted by the PIC board, More was charged with signing a settlement memorandum before the PMC had approved the transaction. She also failed to disclose at a meeting with the portfolio management committee that the memorandum had already been signed

An independent inquiry into More’s role in the Ayo transaction has found that she acted in the PIC’s interests when she convened an urgent meeting with the portfolio management committee to reconsider the Ayo investment. 

She hastily convened the meeting with the PMC on December 20 2017, a day after the settlement memorandum had been signed by her and other PIC senior employees, including the fund manager’s former chief executive, Dan Matjila, and former general manager of finance Brian Mavuka. Mavuka is now the PIC’s acting chief financial officer. 

Ayo listed on the local bourse the following day. The PIC bought a 29% stake in Ayo, which is linked to Iqbal Surve, the co-chairperson of Sekunjalo Investment Holdings. The R4.3-billion transaction was one of several investments by the PIC investigated by the Mpati commission of inquiry which probed impropriety at the asset manager under Matjila.

The fund manager paid an inflated R43 a share at the listing, while the market valued Ayo at R20 a share. The share price has since slipped by more than 90% since 2017.

More testified before the inquiry, chaired by advocate Kennedy Tsatsawane, that she had signed the settlement memorandum but did not approve PIC funds to be released to Ayo. She said she convened the meeting because she learnt that the portfolio management committee did not authorise the PIC’s investment in Ayo before the signing of the settlement agreement in line with the asset manager’s investment procedures. 

She informed Mavuka that payment to Ayo should not be made until the portfolio management committee had authorised the PIC’s participation in the transaction. More further testified that her signature on the memorandum was to indicate that the PIC has sufficient funds for the transaction. 

More failed to tell the portfolio management committee that she had signed the settlement agreement the day before the meeting. But Tsatsawane rejected the PIC’s argument that More’s failure to inform the committee that she had signed the memorandum was an indication that she approved payment of the PIC’s funds to Ayo and that she failed to serve the interests of the PIC. 


Tsatsawane said More’s convening of the meeting is “inconsistent with someone acting without due regard to consequences and it is inconsistent with what gross negligence is about”.

Tsatsawane argued that More’s failure to disclose that the settlement agreement was signed a day before would not have changed the outcome of the portfolio management committee meeting where the Ayo transaction was ratified. This is because on December 14 2017, Matjila breached PIC processes by signing an irrevocable subscription agreement to invest in Ayo. 

By unilaterally signing the irrevocable agreement, Matjila bound the PIC to the Ayo transaction without due diligence being completed or the deal being approved by the portfolio monitoring committee. This too was not revealed to the PMC. 

The portfolio monitoring committee approved the PIC’s participation in the Ayo transaction subject to conditions. The transcripts of the meeting show that former assistant portfolio manager Victor Seanie would be responsible for further negotiations before the transaction was concluded, Tsatsawane said. 

At the portfolio management committee, More recommended to Seanie that the PIC should enter into a put option contract with Ayo. This would ensure that the PIC’s interests were protected if the share price declined. On the same day Seanie sent the resolution passed to PIC employee Asanda Mbekeni, triggering the release of the PIC’s funds to Ayo. 

Tsatsawane found that More was “nowhere next” to this part of the transaction. 

The funds were released by Mavuka in two tranches, R499-million and R3.7-billion, before the negotiations by Seanie were concluded. 

More was cleared of all charges following a disciplinary hearing. 

In a statement the PIC board said More remains suspended because it would be “ill-advised to reinstate More into her position as CFO [chief financial officer] as she is one of the parties that have been implicated in the Mpati commission report”. 

Cleared: PIC chief financial officer Matshepo More was ‘nowhere next’ to the Ayo transaction

The commission’s report, which was released in March, criticised More and Matjila for their involvement in the Ayo transaction and their testimonies to the commission. “At no point did either acknowledge deficiencies in the process or accept either responsibility or accountability for the investment.”

Thando Maeko is an Adamela Trust business reporter at the M&G

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Thando Maeko
Thando Maeko is an Adamela Trust business reporter at the Mail & Guardian
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